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Iron ore prices into the "fast down" time bring disaster to mining supply chain

Goldman Sachs pointed out last weekend, mainly due to an oversupply of iron ore prices have a marked downside risks, market dynamics shift oversupply earlier than expected iron ore prices fell just press the fast forward button. As of November 28 closing, the world's top three miners Vale (VALE), Rio Tinto (RIO) and BHP Billiton (BHP) shares fell during the year were up 40.8%, 12.2% and 18.8%. Iron ore prices plummeted, mining companies have cut costs, leading to difficult mining suppliers, forced to finance integration. Since the second half of this year, part of the mining exploration company's share price fell more than 40 percent, close to historic lows. However, a number of resources focused on private equity industry has been looking for the opportunity to dive into the mining affordable investment opportunities. Iron ore in November fell 10% Goldman Sachs announced last weekend, maintain the average price of iron ore in 2015 was $ 85 / tonne expected to remain unchanged. Goldman Sachs analyst Christine Lelong and Caian Bo said the iron ore price is expected to be maintained unchanged, partly because China's recent economic data uncertainty. Up to now, the average price of iron ore this year, $ 99.73. So far this year, iron ore prices have plunged 47 percent, the worst performance of commodities. Mainly due to the slowdown in Chinese demand and excess global supply, November iron ore prices fell nearly 10%. Goldman pointed out that as Vale, Rio Pinto, BHP Billiton and other mining giants hope that through higher yields to offset the fall in prices, while closing the lack of competitiveness of mines, leading to global iron ore oversupply difficult to reverse. At the same time, because the real estate market cooled and the investment slowdown, China's iron ore demand for the country's largest economy this year may usher in the slowest growth rate since 1990 year. Goldman previously released report entitled "The End of the Iron Age," said the decline in iron ore prices this year than expected earlier time, and are unlikely to recover, which means that 2014 will be the so-called Iron Age End of iron ore has entered a bear market in commodities generally mark the opening period. Goldman Sachs noted: In our opinion, the iron ore mining by investment phase to phase. In the mining period, commodity prices are usually suppressed by two factors, one is mining labor productivity increased deflationary forces generated by the two commodity currencies are devalued. Goldman Sachs expects global iron ore supply surplus will increase to 163 million tons in size by 2015, reaching 245 million tons in 2016, the surplus in 2017 and 2018 respectively will be 295 million tons and 334 million tons of supplies. In addition to the absorption by rising inventories, some second-tier overseas iron ore producers will be forced to cut production. Goldman Sachs predicts that iron ore producers may cut up to 40 million tons per year in 2015 and 2016. Bring disaster to the mining supply chain iron ore prices continued to fall, collective mining companies to cut costs, affecting the mining supply chain, forcing the chain upstream and downstream enterprises to start self-help. Huge mining supply chain, from equipment manufacturing to machinery maintenance, supply of food and clothing and even the miners, the mining boom decade Zeng mining supply chain greatly benefit. But this year, the mining equipment and service providers an average share price has fallen 22%, about 13% more than the overall metals and mining companies fell. (CEO) Russell Hallbauer mineral exploration company Taseko Mines (TKO) chief executive, said: for everyone, the days are not so better than a. One of the world's largest drilling service companies in Canada Major Drilling GroupInternational (MDI) CEO Francis McGuire said: with the industry's ongoing pure price competition. After the middle of this price level is unsustainable and will affect the ability of the industry to maintain the quality of the equipment. Since the second half of this year, the two company's share price has plunged 45.5%, respectively, and 14.8%. For the recovery of cash, corporate mining supply chain portion is clearing inventory or restructuring. Mining equipment rental company Emeco Holdings as of June this year, a year, sold about $ 60 million worth of idle assets. Currently, drilling and blasting services company Ausdrill (ASL) stock price nearly 12-year lows. Since the second half of this year, small-scale mining companies AzumahResources (AZM) stock is down 32.6%. In the wake of the global mining boom faded, some private equity funds are looking for bargain-hunting opportunities are to sneak into Australia, their goal is promising some of the original price competition has suffered bitter enterprises and projects. One of the world's largest private equity investors in the resources sector resources capital funds, energy and mining firm Denham Capital and private equity Royalty Stream Investments and other funds, said there are ways to lower costs to help mining enterprises to establish and run their businesses.


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